April 25, 2024 | Last Updated on: September 2, 2024
In March 2024, two major small business lenders, Funding Circle and Amazon, announced they would scale back their business lending programs. These programs provided financing to small and medium-sized businesses and were a vital funding source for many small business owners.
Just because these lenders closed some of their funding programs doesn’t mean your business has to go without vital resources. If you’re a small business owner looking for funding, keep reading to learn more about what these recent announcements mean, what to do if your funding provider closes, and how to find alternative funding opportunities.
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Neither Funding Circle nor Amazon will close their lending programs entirely, but they will stop funding new loans for many new and existing customers. Here’s what to know about the status of each company:
Online lender Funding Circle announced it would sell its US business to focus on its UK branch. The company acted as both a lender and a marketplace to provide business loans and connect customers to merchant cash advance companies.
Funding Circle’s US-based business had reported hard but expected losses in 2023, leading to the decision to sell. A buyer has not been announced at the time of this article’s publication.
As of March 6, 2024, Amazon has closed its in-house term business loan program. The program provided small and medium-sized businesses with term loans up to $250,000 and merchant cash advances up to $10 million.
Although Amazon Lending will no longer offer these services in-house, it will continue to provide some products through third-party providers on an invitation-only basis.
If your small business funding provider closes, there are several steps you should take to protect your interests and ensure continuity for your business.
It’s best to prepare questions before you contact your funding provider to ensure that you get all the answers you need. Here are some to get you started:
Keep a record of the answers you receive and take note of who you spoke to and when. These details can be helpful if your account is taken over by another person or provider in the future.
Don’t let your business go without cash flow just because your funding provider closed. Use the tips below to find new funding opportunities.
You may also like: alternative revenue-based financing options
The best funding opportunities for your business will depend on your unique situation. Contacting your accountant or CPA is a great place to get started. These financial experts will be able to evaluate your business and goals and provide recommendations based on your needs.
Small Business Administration (SBA) loans can offer valuable funding for your small business. SBA loans offer competitive interest rates and longer repayment terms than traditional bank loans, making them an attractive financing option for small businesses. However, while SBA loans offer favorable terms, they still require repayment with interest, so make sure to account for that in your budget forecasting.
To apply, begin by assessing your business’s financial needs and ensuring that you meet the eligibility requirements set by the SBA, which typically include factors such as creditworthiness, collateral, and a solid business plan.
Funding Circle and Amazon Small Business Lending aren’t your only options. There are many different providers who can help you secure the funding you need through different financial products.
When looking for a new funding partner, seek out providers who offer different products, so you can choose the best option for your business.
If you need immediate funding, consider revenue-based financing providers. This type of funding has a straightforward application and fast approval times, making it ideal for businesses in need of immediate capital. Term loans can also be a useful tool. But this option may take longer to secure, so it is better suited for businesses without a pressing need for capital.
At Biz2Credit, our number one priority is helping small businesses grow and thrive. Since 2007, we’ve helped tens of thousands of small businesses secure more than $8 billion in commercial funding. Get started by learning more about our revenue-based financing and term loan options.
The closures of Funding Circle and Amazon Lending don’t have to be the end of your funding journey. There are still plenty of alternative sources for financing your small business. If you would like a personalized consultation with a Biz2Credit funding specialist, get in touch with us today. Your business growth is our priority.
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